James Flintoft: Long gilts and the price of credibility

UK gilt yields have moved sharply in the last month. The 30-year briefly moved through 5.80%, levels not seen since 1998. Likewise, the 20-year ticked through 5.80% and the 10-year nearly 5.20%. The whole yield curve was repriced, and whilst these yields are in some cases over 30bps lower now, bond investors have been reminded of the dangers of duration. Bank Rate, by contrast, sits at 3.75%. The path of interest rates has been the subject of wild speculation and communication blunders from the Bank of England since the Iran conflict broke out, which contributed to the volatility in b...